Tomypak Holdings Berhad Harvard Case Solution & Analysis

1. Introduction

The purpose of this report is to provide the investor with the financial position of the company in order to enable them for making investment decisions in the prospect company which is Tomypak Holdings Berhad. This report analyses the financial position of Tomypak Holdings Berhad, which operates in flexible packaging industry and is based in Malaysia. Meanwhile, the analysis of the prospect company is based on the analysis of its product portfolio, the capabilities and expertise of its directors and the management team. Additionally, the analysis of Tomypak Holdings Berhad is also based on the financial results of the company, which includes the statement of financial position, and statement of comprehensive income made up to 31st December 2013. Moreover, the report also evaluates the performance of Tomypak in comparison to its direct competitor, Daibochi Plastic and Packaging Industry Bhd; meanwhile, Tomypak is also evaluated for the business risk to which it is exposed.

However, the analysis of this report is purely based on the information published by the company from time to time and the known performance evaluation used in analyzing the prospect companies for the investment. This report is made up to the events that have taken place on or before 31st March 2014 and any events that happened after 31st March 2014 are not part of this report. Therefore, the reader of this report is advised to evaluate the prospect company on their own analysis and rational before making final decision on investment in the prospect company.

2. General Company Description

Tomypak Holdings Berhad (Tomypak) was established in 1979 and is based in Malaysia. Tomypak operates in the packaging industry and is involved in the manufacturing of packaging material for food items; meanwhile, the company strongly believes that their success is in the continuous development and provision of advanced packaging material that serves the changing needs of customers. Further, the company aims to provide not only traditional packaging material, but also a packaging material that not only serves as packaging but it increases the value of packed items. However, after 19 years of successful operation Tomypak got listed on Malaysia Stock Exchange in 1996. Further, Tomypak has a work force of 400 employees and its production plant is built over an area of 14,018 square meters. Additionally, because of the quality of its packaging material, Tomypak is certified by the HACCP and it also owns HALAL certification.

2.1. Ownership structure

Tomypak Holdings have an authorized share capital of RM 100 million, which has been divided into 200 million ordinary shares out which 109.34 million shares have been issued as at 31 March 2014. However, the ownership of Tomypak is divided into 1,931 shareholders who have different portions of shareholding. Meanwhile, the ordinary shareholders have one voting right for every share they own. Further, the majority of ordinary share is owned by only 5 shareholders, which increases the chances that they can collectively control the decision of Tomypak, however, the five shareholders collectively own 50,526,251 shares which represent the 46.21% of issued ordinary shares. Meanwhile, these shareholders comprise of Teng Chew Guat who owns 19.48% of the issued ordinary shares and he is the spouse of director Chow Yuen Liong who is a non-independent executive director of Tomypak.

Additionally, the second largest shareholder of Tomypak is HSBC Nominees (Asing) Sdn Bhd, which owns 9.89% of the issued ordinary shares, Further HSBC Nominees (Asing) Sdn Bhd is a sub-subsidiary of HCHC Holding PLC and it’s owned and governed by the HSBC Bank Malaysia Sdn Bhd. Moreover, another major shareholder of Tomypak is Chow Wen Chye who owns 6.02% of the issued ordinary shares, meanwhile, Chow Wen Chye is the a non-independent director of Tomypak and also the father of one of the non-independent director Teng Chew Guat. In addition to this, 5.81% of the shares are held by a sub-subsidiary of a commercial bank which is RHB Capital Nominees (Asing) Sdn Bhd and 5% holding of Tomypak is owned by a Zalaraz Sdn Bhd which is a Malaysian based company.....................

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